I recently attended a wine industry "Direct to Consumer" (DTC) symposium conducted by a consulting group here in Napa for wineries and tasting rooms. It was the first of its kind here for me and I believe only the second or third year that they have conducted such an event. The marketers came out in droves all very eager to find the next big thing in direct marketing (DM) for their brands or wine clubs to consumers. I was curious to rate the 'state of the union' of DM within this industry. I learned a few things and had a few surprises...but it was mostly a review of things I had been practicing for years and additions to my to-do list. But even still, all good stuff.
Now, keep in mind, I enter in a bit cynical in that I come from some of the most sophisticated and long-standing DMers of all, the catalog industry. I spent almost 15 years running my own catalog company and then consulting for some premium brand catalogers from back in the early 90's till recent (ooooh, I'm dating/aging myself here aren't I...?). However, this is what drew me to Napa and the wine industry...the opportunity to make a big difference AND introduce some of these tools to a trade category I love. It is wrought with opportunities.
Here is a summary of the most outstanding observation items from the show:
1. Social Networking. If you not in this space, you better get there quickly or it will blow right by you. Wine individuals, wine groups, sales websites, restaurants and wineries are all jumping in head first...some more diligently than others. This isn't new by any means, but the urgency to have a real presence here and the level in which you participate is. The clear message was also that you either enter this space and keep it current/relevant or don't enter at all.
2. Customer Data. Whether data capture or data-mining, you better have a good handle of what to do with the customers in your database or wine club. This is probably the most glaring distance from the catalog industry as few wineries know exactly what to do with their customer files to both maximize their communication channels with them or keep it current and updated/clean. There was some talk of a wine data alliance of sorts (which has been prolifically used in the catalog industry for well over a decade), but there were mostly "deer in the headlights" reactions to such a thing for the wine industry. Share names...? We wouldn't dare... our cusomters are unique and ONLY buy my wine for sure! Uh, yeah, OK.
3. Sales & Customer Data Analysis. The term 'RFM' was only mentioned once in all my seminars and discussions with other marketers...even then only briefed over. This is the data 'Holy Grail' standard with catalogers and is really only a base of which to begin looking at your customers and their activity/buying tendencies. It is a basic ranking system that stands for; Recency - how recent have your customers been active or made purchases, Frequency - how often your customers are purchasing from you, and Monetary - how much your customers are spending with you. This information is critical to know who, how, when, where and how much to communicate to your customers. The analysis and segmentation can get as complex as you want from there.
4. Customer Touchpoints. Just recognizing how many times or the opportunities in which your customer will be exposed to your product or brand is the first step. You'd be surprised how many of these opportunities get missed to either promote residual sales, get referrals, drive visitor center/wine tasting traffic, update data, or survey customers. This is one of the crowning points of DM in that you get to directly control your brand presentation at all of these points if you choose.
5. "Always On Economy". I loved this term from the CEO of Snooth, and it exemplifies the current status of both technology and the power of social networking. It refers to the level at which the customer is always 'watching' and you better be putting your best foot forward at all times. The old saying, "It is 10 times more difficult to acquire a customer than to retain one" could not be more prevalent than now. Your brand is only as good as its last memory of the customer. You get few chances to make up for a bad experience or poor exposure...there are just too many (better) choices for consumers now.
6. The New Economy. Hard to deny this at any level. The actual number of wine purchases is not down, but the category level of buying is. Luxury brands obviously taking the biggest hit here and wines in the $10- $20 space are rocketing with one of the fastest growing groups of buyers being the "millennials" (Gen Y) in their mid to late 20's. Liquor has almost always been viewed as 'recession-proof', and wine follows suit here for the most part. But, the everyday wines (commonly refered to as "Wednesday night" wines) are definitely falling in to the under-$20 category. Plus, women seem to be the biggest buyers here.
7. Food & Wine Pairings. One the best terms I heard throughout the conference was "home base phenomenon" referring to more people staying and dining/drinking at home rather than going out. This in turn creates more demand and interest in food and wine pairings or recipes that people can relate to and perform at home. This falls in to the 'added value' category that wineries can provide for their customers in their regular communications to their base.
8. Communications To Base Customers. How's that for a segue? This is not only the type of communication to customers but the frequency. Oddly, most are not communicating with customers enough with the consensus recommending at least once per month via email and 4-6 other times with direct mail or other marketing pieces. No surprise here.
9. Customer Relationship Management (CRM). This was big buzz-word with catalogers almost 10 years ago and wineries are just now realizing that this requires a true dedicated diligent effort. They discussed the three 'R's' - Relationship (building), Relevance (product/offer), Results (reading). It is way more about just keeping your good customers happy, it is truly about all of the above items I've touched on combined in to one big effort to create a real relationship with your customer and listening to their needs well beyond what type of wine they drink or buy. This also links back to the social networking aspect of getting more involved with people on an 'intimate' level and leveraging their circles of influence.
Well, 9 out of 10 ain't bad, I'll stop here...I could go on and on with this, but don't want to give up all my trade secrets at once. ;-} There is so much more to be addressed, but as usual, it comes down to prioritizing, resources, and the ability to execute programs fully.
In the end, it is kind of like breaking most comfort zones or habits people get in to...recognizing the problems/deficiencies first and then identifying a starting point then methodically working from top to bottom with the resources you have.
Best of luck and as always...
Till the next sip...swirl ya' later!
James
Chief Wino
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